Brisbane’s impressive property growth remains as Australia transitions out of lockdowns.
Australian household wealth has reached a new peak despite the persisting impact of COVID-19’s forced saving behaviour. A combination of record interstate migration figures and low interest rates have produced a fundamentally positive sentiment for the city’s property market.
House prices significantly increased by 11% in the fourth quarter, reaching a median of $915,000. This continued momentum resulted in an overall 22% gain from 2020. Additionally, Brisbane experienced the greatest rise in rents among all capitals, edging toward a median of $550 per week.
From December 2020 to 2021, the off-the-plan apartment market has realised an annualised 16% gain in value, reaching a weighted average sale price of $1,020,000.
With regard to the overall market including resales, the median price of a unit is $455,000 calculating to less than half the price of a median-priced house resulting in a historically high price gap. The average rent per week and gross yield for apartments are $400 per week and 5%, respectively, while vacancy rates are at a historically low 1.1%, down from 2.8% at the start of COVID-19.
Regardless of the gap of capital growth between houses and apartments, the sales volume for apartments over the past six months has now surpassed the five-year average by 20%, with 7,358 transactions. Interestingly, house sales slightly decreased from 7,344 to 7,292 in the same period. There were 385 new apartment sales recorded for the December quarter, just 20% shy of doubling that of the same period in 2020.
Building approvals in Brisbane gained traction in the final quarter of 2021, particularly developments over eight storeys high. There has however not been a significant increase in approvals that directly correlate with the mass migration into Brisbane; there could potentially be a perfect storm brewing for demand to outstrip available stock. Additionally, the increase of construction costs is staving off the release of new projects. Regardless, the notable increase of the weighted average sale price is a positive outlook for the off-the-plan apartment market.
Value Gap
